Can foreigners buy units at Johor's Forest City? Ministry to assess terms

Visitors at Country Gardens' Forest City showroom in Johor Bahru in Malaysia, on Aug 28, 2018.
Visitors at Country Gardens' Forest City showroom in Johor Bahru in Malaysia, on Aug 28, 2018.ST PHOTO: JOYCE FANG

KUALA LUMPUR • Remarks by Malaysian Prime Minister Mahathir Mohamad that foreigners will be barred from buying residential units at the Forest City development in Johor has caused some confusion, with Malaysia's Federal Housing Ministry saying it has been tasked with studying the residential agreements in the project.

Housing and Local Government Minister Zuraida Kamaruddin told reporters that what was said by Tun Dr Mahathir on Monday has not been formalised into policy.

"We will form a committee to study and review whatever terms were agreed to previously," she said. "We will engage with all the agencies involved and also the developer. Then we see what is the best way forward."

She added: "For the time being, it is still undecided if they can sell property to foreigners. We must assess and then provide the Prime Minister with a report."

The 13.86 sq km property project, spanning four man-made islands off the Johor coast, is across from Singapore's Tuas and nearly three times the size of Sentosa island.

The US$100 billion (S$136 billion) Forest City, which comprises apartment blocks, landed houses, office towers, hotels and shopping centres, is meant to eventually have 700,000 residents.

RESTRICTIONS ALREADY IN PLACE

We already have in place a requirement that foreigners can purchase only properties worth RM1 million (S$332,600) and above. The previous government also introduced policies to include international zones within the project and other parts of Johor.

MR DZULKEFLY AHMAD, Johor's Housing and Rural Development Committee chairman and a member of the state Cabinet.

Johor's Housing and Rural Development Committee chairman Dzulkefly Ahmad, a member of the state Cabinet, said on Monday that Dr Mahathir's comments came as a shock as there had been no discussions with Johor, which like the central government is controlled by the Pakatan Harapan (PH) alliance.

Mr Dzulkefly said land matters such as the Forest City development come within the purview of the state government and not the federal government.

"We are still trying to make sense of this new move, as we have yet to be informed," he said, according to The Star newspaper.

The Forest City developer, led by China's Country Garden, said on Monday that it was seeking clarification from the Prime Minister's Office (PMO) in Malaysia.

Shares of Country Garden, China's largest property developer by sales, ended 3.3 per cent lower in Hong Kong yesterday.

 
 

When asked at a news conference on Monday about Forest City, Dr Mahathir said: "One thing is certain, that city that is going to be built cannot be sold to foreigners.

"We are not going to give visas for people to come and live here."

He added that the government objected to the massive development "because it was built for foreigners, not built for Malaysians".

"Most Malaysians are unable to buy those flats," he said.

The massive development was used as a political weapon by PH in the long run-up to the general election in May, at a time when Malaysians worried about the rising prices of homes.

Dr Mahathir, then an opposition leader, said foreigners who bought units in Forest City and other projects in Johor Baru could get voting rights if they lived in the country long enough.

He also said foreigners who bought units in those luxury apartments could number 1.5 million people, and outnumber Malaysians in Johor Baru.

Malaysia's PMO said in a statement yesterday that the purchase of property does not give a buyer automatic residency.

It said property purchases by foreign nationals must abide by the country's rules and regulations, and that it welcomes all tourists including those from China.

Malaysia, in general, allows foreigners to purchase only residential units that are priced at RM1 million (S$332,600) and above, with several states placing higher minimum prices.

"On property purchases by foreigners, irrespective of nationality, Malaysia imposes certain conditions, and information on these conditions are publicly available," said the PMO statement.

"Purchase of properties, however, does not guarantee automatic residency in the country."

The statement added that foreigners wishing to make Malaysia their permanent place of residence could join the Malaysia My Second Home programme.

Under the programme, multiple-entry social visit passes for 10 years - which are renewable - are issued by Malaysia.

The PMO statement said China tourists are given 30-day visas.

"Malaysia welcomes all tourists including from China and there are no restrictions imposed on foreign tourists for as long as they meet all the necessary immigration requirements imposed by the Malaysian authorities."

Last year, 2.3 million Chinese tourists came to Malaysia and the South-east Asian country said it is looking to attract 10 million in the coming years.

 
A version of this article appeared in the print edition of The Straits Times on August 29, 2018, with the headline 'Can foreigners buy units? Ministry to assess terms'. Print Edition | Subscribe